Tune Protect sees strong recovery in 2024, driven by travel segment, cost efficiency
Its chief executive officer How Kim Lian, attributed this impressive performance to notable growth in net insurance service results and Profit After Tax (Pat).
SHAH ALAM - Tune Protect Group Berhad (Tune Protect or Group; TUNEPRO, 5230) recorded its highest quarterly profit in the fourth quarter of 2024 (4Q24) and a significant recovery for the full financial year 2024 (FY24).
The Group’s chief executive officer, How Kim Lian, attributed this impressive performance to notable growth in net insurance service results and Profit After Tax (Pat).
“Overall, the Group’s financial performance in 4Q24 and FY24 was commendable. We registered RM9.5 million Pat for 4Q24 and RM2.7 million for FY24, which signalled a strong recovery trend for the Group.
“The Group’s net insurance service result surged by 82.8 per cent quarter-on-quarter (QoQ) to RM11.1 million in 4Q24 and exceeded 100 per cent year-on-year (YoY) growth to RM3 million for FY24, mainly attributed to portfolio mix changes and a lower reinsurance ratio.
“Although insurance revenue increased significantly YoY, it declined marginally by 1.2 per cent QoQ to RM99.0 million in 4Q24. Excluding the RM43.6 million Tenang impairment in 4Q23, insurance revenue growth remained strong at 14.2 per cent YoY.
“Pat increased by over 100 per cent, driven by top line growth, lower reinsurance premiums, lower attributable expenses and lower tax provisions,” How said.
The Group’s combined ratio improved both YoY and QoQ in 4Q24. Even after excluding the Tenang scheme impairment, the combined ratio saw a 6.8 percentage points improvement from 4Q23’s adjusted 95.5 per cent.
FY24’s insurance revenue rose by 4 per cent YoY to RM389.2 million, while the net insurance service result rebounded from a RM9.0 million loss in FY23 to RM3 million.
Despite lower investment income due to market volatility and a RM6.6 million impairment from Tune Protect Thailand’s (TPT) claims recovery, Pat reached RM2.7 million.
“We also achieved a combined ratio of less than 100 per cent and lower by 3.2 per cent YoY in FY24. Combined ratio continues to improve due to better cost efficiency and lower reinsurance ratio.
“This was primarily driven by higher insurance revenue supported by growth in travel, lower allocation of reinsurance premiums in line with our strategy to exit from the large Commercial segment and lower attributable expenses (management expenses) compensating higher claims from Motor and Fire for the year.
“Higher net incurred claims and attributable expenses ratio which increased 6.7 per cent YoY were mainly due to four large Fire losses in 2024 and higher Motor losses recorded in the year,” he said.
---
The Group clarified that key events impacting Profit Before Tax (PBT) in FY24 were one-off occurrences and excluding these, PBT would have been RM16.1 million.
These one-off events included the Group’s exposure to four large Fire losses.
“The frequency of these large claims was higher than previous years and we expect it to normalise moving forward. Another key event was impairment losses on intangible assets from our digital life insurance entity (Tune Protect Ventures) in 2Q24.
“Digital life traction was slower than anticipated while the health business can be offered via Tune Protect Malaysia (TPM), " How added.
Another key event was TPT’s impairment related to claims recovery in relation to a PA Account, which was fully taken up in 2Q24.
Despite market volatility, Tune Protect investment performance remained stable, closing at RM30.0 million YoY.
“During 4Q24, we completed the rebalancing of our portfolio into investment in Low-Risk Unit Trust funds which are predominantly invested in Malaysian Government Securities, Government Investment Issues and Government Guaranteed Corporate Bonds.
“The Travel segment remains a key focus for 2025, with Tune Protect expanding into 10 new inbound travel markets, including Australia, India, Japan, Brunei and Taiwan. Additionally, the Group onboarded top travel agents in Malaysia, four online brokers in Thailand and four new Online Travel Agencies (OTAs) in Thailand and Indonesia.
“We have also been aggressively recruiting top travel agents of our key airline partner in Malaysia and expanding our distribution partners by onboarding four online brokers in Thailand, and four new Online Travel Agencies (OTAs) in Thailand and Indonesia for distribution of Travel Insurance in these markets.
“Besides activating new markets and establishing our network with new partners, we have also rolled out the Delay Lounge Pass in most markets in Asia through our airline partner to provide customers the convenience of airport lounges during flight delays and we are planning to expand it to other markets beyond Asia,” he said.
Tune Protect is also taking steps to optimise its Motor insurance portfolio by refining pricing strategies and improving claims management.
The Group’s strategy aims to improve loss ratio and align the Motor performance with industry standards, with the expectation of favourable impact on the overall Motor claims ratio in 2025.
Tune Protect is planning to gradually increase the portfolio mix for the segment with a better loss ratio.
Looking ahead, Tune Protect aims to strengthen its travel insurance offerings by enhancing product features, pricing and benefits while deepening its airline partnerships and expanding into new markets such as China and Thailand.
The Group is also exploring bundling travel-related services like eSIMs and bite-sized Flight Delay Insurance.
“Our strategic focus will continue to emphasise on the expansion of our travel insurance products and other profitable business segments while focusing on our cost and claims management.
“By leveraging on our expertise and innovative methodologies, we aim to identify and capitalise on new market opportunities and thereby achieve sustainable growth,” How said.
Download Sinar Daily application.Click Here!
